Medicaid Expansion in Michigan
Michigan obtained approval from the Centers for Medicare and Medicaid Services (CMS) to implement the Affordable Care Act’s (ACA) Medicaid expansion through a Section 1115 demonstration waiver, called the “Healthy Michigan Plan.” The waiver was approved on December 30, 2013, and was implemented beginning April 1, 2014. The legislation enacting the Medicaid expansion required the state to submit a waiver amendment by September 1, 2015, and receive CMS approval by December 31, 2015. If the state does not receive approval of the amended waiver, the legislation calls for the termination of the Healthy Michigan Plan on April 30, 2016.1
Under the current Healthy Michigan Plan, the state provides Medicaid coverage to all newly eligible adults with income up to and including 138% of the federal poverty level (FPL, $16,243 per year for an individual in 2015).2 An estimated 600,000 adults are enrolled in coverage through the waiver as of September, 2015.3 The waiver requires all beneficiaries to make monthly payments into a health savings account based on their average co-payments for services used in the previous six months (at state plan amounts). The waiver also requires beneficiaries from 100-138% FPL to make income-based monthly premium contributions to health savings accounts (2% of income). Health savings account payments can be reduced through compliance with specified healthy behaviors, and failure to pay copayments or premiums does not result in a loss of Medicaid eligibility. The waiver uses Michigan’s pre-existing Medicaid Managed Care Organizations (MCOs), and Pre-paid Inpatient Health Plans (PIHPs) for mental health and substance abuse services, to serve the newly eligible population.
Under the waiver amendment that was submitted to CMS on September 1, 2015, the state proposes that beneficiaries between 100% and 138% FPL enrolled for 48 cumulative months would be required to choose between two new coverage options:4
- Marketplace coverage through a Qualified Health Plan (QHP) with Medicaid premium assistance for premiums in excess of 2% of income and cost-sharing subsidies, or
- Continued coverage through Medicaid managed care but with increased cost-sharing (premiums of 3.5% of income (up from 2%) and total cost sharing of up to 7% of income (up from 5%, which is the federal statutory limit).
If beneficiaries do not choose Marketplace coverage with Medicaid premium assistance, the state proposes that they will default into Medicaid managed care at the increased cost-sharing amounts; these beneficiaries would have cost-sharing that exceeds both Medicaid and Marketplace limits. The first beneficiaries will not reach 48 cumulative months of coverage until April 2018. Additionally, Michigan’s waiver proposal would be the first Medicaid expansion waiver to vary the type of coverage and cost-sharing obligations based on the time that a beneficiary has been enrolled. Administering this provision also will require the state to track beneficiaries’ income and months of coverage to administer.
As of November 2015, 31 states (including DC) have adopted the ACA’s Medicaid expansion. Michigan is one of four states (along with Arkansas, Indiana, and Iowa) that are implementing the Medicaid expansion using a Section 1115 demonstration waiver. New Hampshire will transition to demonstration authority as of 2016, and coverage under Montana’s recently approved demonstration will begin in January 2016. Pennsylvania had initially implemented the Medicaid expansion using a Section 1115 demonstration but later transitioned to a traditional Medicaid expansion using state plan authority.
Table 1 highlights the components in Michigan’s original waiver that are currently being implemented as well as proposed changes in the waiver amendment submitted to CMS.
|Table 1: Michigan’s Current Healthy Michigan Plan and Proposed Waiver Amendments|
|Element||Current Healthy Michigan Plan||Michigan Waiver Amendment Proposal|
|Overview:||Covers childless adults ages 19 to 64 from 0 to 138% FPL statewide.|
|Covers beneficiaries through Medicaid managed care. Requires copayments at state plan amounts for beneficiaries 0-138% FPL, which may be reduced by participating in specified healthy behavior activities. Copayments are paid into health savings accounts monthly based on the average copayments for services used in the previous six months. Also requires beneficiaries 100-138% FPL to make income-based monthly contributions (2% of income) to health savings accounts. Beneficiaries cannot lose or be denied Medicaid eligibility, be denied health plan enrollment, or be denied access to services, and providers may not deny services, for failure to pay copays or premiums.||Creates 2 options for beneficiaries 100-138% FPL who have been enrolled in the Healthy Michigan Plan for 48 cumulative months:
Option 1: transfer to QHP coverage in the Marketplace with Medicaid premium assistance and cost-sharing subsidies, or
Option 2: continue to receive coverage through Medicaid managed care but with premiums increased to 3.5% of income and total cost-sharing (including premiums and copays) increased to 7% of income, both of which could be reduced by participating in specific healthy behavior activities.
|Duration:||12/30/13 to 12/31/18. Enrollment began 4/1/14.||Seeks amendment approval by 12/31/15 for implementation 4/1/18. Failure to secure CMS approval by 12/31/15 results in the termination of the Healthy Michigan Plan.5|
|Coverage Groups:||Adults ages 19-64 up to 138% FPL (childless adults 0-138% FPL, non-working parents from 37-138% FPL, and working parents 64-138% FPL).6||Adults ages 19-64 between 100% and 138% FPL who have had waiver coverage for 48 cumulative months.|
|Exempt Populations:||Noncitizens eligible only for emergency services; Program for All-Inclusive Care for the Elderly (PACE) participants, and individuals residing in Intermediate Care Facilities for Individuals with Intellectual Disability (ICFs/IDD).||Newly eligible adults who are medically frail are exempt from the 48 month coverage choice and will remain in the Healthy Michigan Plan without increased premiums and cost-sharing.|
|Premiums:||Beneficiaries above 100% FPL pay monthly premiums in the amount of 2% of income.
Beneficiaries cannot lose or be denied Medicaid eligibility, be denied health plan enrollment, or be denied access to services, and providers may not deny services for failure to pay premiums.
Cost-sharing and premiums cannot exceed 5% of household income.
|Option 1: Beneficiaries would pay Marketplace QHP premiums, which cannot exceed 2% of income.
Option 2: Beneficiaries would pay premiums up to 3.5% of income and continue to receive coverage through Medicaid managed care.
|Co-Payments:||All demonstration beneficiaries have cost-sharing obligations based on their average prior 6 months of copays, billed at the end of each quarter. Cost-sharing is paid into health savings accounts and can be reduced through compliance with healthy behaviors. Amount of cost-sharing is based on state plan amounts and not changed from what would have been collected without the waiver.7
Beneficiaries cannot lose or be denied Medicaid eligibility, be denied health plan enrollment, or be denied access to services, and providers may not deny services for failure to pay copays.
Copays in excess of 2% of income may be reduced through compliance with healthy behaviors.
Cost-sharing and premiums cannot exceed 5% of household income.
|Option 1: Beneficiaries will be subject to QHP cost-sharing and receive a cost-sharing subsidy in the form of Medicaid premium assistance.
Option 2: Beneficiaries would face total cost-sharing up to 7% of household income, which exceeds the 5% statutory limit.
Co-pays in excess of 3% of income may be reduced through compliance with healthy behaviors.
|Health Account and Healthy Behavior Protocols:||Health savings account and healthy behavior protocols were developed by the state and approved by CMS. The health account protocol describes the online accounts used by beneficiaries enrolled in MCOs to manage their MI Health Account and the healthy behavior protocol describes the services beneficiaries can engage in to decrease cost-sharing requirements and how engaging in these activities decreases their required cost-sharing. Changes to the protocols are also subject to CMS approval.8||The state will seek to expand the healthy behavior activities that could be used to decrease in cost-sharing, such as historical receipt of preventive services and evidence of appropriate utilization patterns.
Beneficiaries will be required to complete these healthy behaviors during the previous 12 months to be eligible for copayment and premium reductions.
|Delivery Systems and Benefits:
|The plan does not include any waivers of Medicaid benefits.
Medicaid MCOs and PIHPs (for mental health and substance abuse services) are used to serve the newly eligible population.
|The amendment does not seek any waivers of Medicaid benefits.
Option 1: Beneficiaries would be covered through QHPs in the Marketplace. The waiver amendment states that beneficiaries in option 1 would remain eligible for the services in the Medicaid Alternative Benefit Plan (ABP) for new adults and would receive essential health benefits through QHPs. The comment section of the waiver amendment states that individuals eligible for waiver coverage will receive comprehensive services consistent with state plan requirements; however, the waiver amendment does not specify how benefits included in the ABP but not offered by the QHP would be provided.
Option 2: Beneficiaries would continue to be enrolled in the current Medicaid MCOs and PIHPs.
|Plan Choice and
|Enrollment broker assists beneficiaries with plan selection before relying on auto-assignment.
According to the waiver, auto-assignment first takes into account beneficiary’s prior or current MCO history and then MCO affiliation of beneficiary’s historic providers.
In rural counties,9 there will only be one MCO. In all other areas, beneficiaries will have a choice of MCOs. There will be one PIHP per region.
MCO lock-in for 12 months after initial 90 days to switch plans.
|Financing:||The budget neutrality limit calculations for the Healthy Michigan Waiver are estimated to be the PMPM for each year ($515.85 million in the first year increased by 5.1%) multiplied by the number of eligible member months and adding the products across years and applying the federal share. The waiver application estimated 5 year budget neutral costs of $15.2 billion: $2.2 billion in CY 2014, $3 billion in CY 2015, $3.2 billion in CY 2016, $3.4 billion in CY 2017, and $3.5 billion in CY 2018.||The proposed amendment states that it is not anticipated to have a material impact on the current budget neutrality agreement but no further details are provided.|
|Evaluation:||An evaluation design was developed by the state and approved by CMS to examine the following topics: uncompensated care costs, reduction in number of uninsured, impact on healthy behaviors and health outcomes, beneficiary views on impact of demonstration, impact of contribution requirements, and impact of health accounts.10||The evaluation design will be updated to reflect changes proposed in the amendment.|
Mich. Comp. Laws § 400.105d, http://www.legislature.mi.gov/(S(w0bdpchgm1olcvuemkvl5bic))/mileg.aspx?page=getObject&objectName=mcl-400-105d.
Marilyn Tavenner, Administrator of the Centers for Medicare and Medicaid Services, Waiver Approval Letter, December 30, 2013, accessed on January 3, 2014, http://www.michigan.gov/documents/snyder/Healthy_Michigan_1115_Demonstration_Approval_12302013_443466_7.pdf.
Healthy Michigan Plan, A Waver Amendment Request Submitted Under Authority of Section 1115 of the Social Security Act at 2, September 1, 2015, https://www.michigan.gov/documents/mdch/CMS_HMP_1115_Waiver_Amendment_Submission_498740_7.pdf.
Healthy Michigan Plan, A Waver Amendment Request Submitted Under Authority of Section 1115 of the Social Security Act, September 1, 2015, last accessed on October 5, 2015. https://www.michigan.gov/documents/mdch/CMS_HMP_1115_Waiver_Amendment_Submission_498740_7.pdf.
This is the first date an individual would reach 48 cumulative months of enrollment.
Childless adults ages 19-64 from 0 to 35% FPL eligible for Michigan’s limited benefit package covered by the Adult Benefits Waiver that existed prior to initial implementation of the Healthy Michigan Plan transitioned to full Medicaid coverage as part of the new expansion group.
Beneficiaries are subject to co-pays according to the current state plan (inpatient hospital admission (except emergent admission), $50; non-emergency use of the ER, brand-name drugs, dental visit, or hearing aid, $3; physician, podiatry, or vision office visits, $2; outpatient hospital or chiropractic visit or generic drugs, $1).
MI Health Account protocol is Attachment E, and the healthy behaviors protocol is Attachment F of the waiver’s Special Terms and Conditions.
Counties considered rural are Alger, Baraga, Chippewa, Delta, Dickinson, Gogebic, Houghton, Iron, Keweenaw, Luce, Mackinac, Marquette, Menominee, Ontonagon, and Schoolcraft.
Evaluation plan is Attachment B of the waiver’s Special Terms and Conditions.
also of interest
- The ACA and Medicaid Expansion Waivers
- Medicaid Expansion in Arkansas
- Medicaid Expansion in Indiana
- Medicaid Expansion in Iowa
- Medicaid Expansion in Montana
- Medicaid Expansion in New Hampshire
- Medicaid Expansion in Pennsylvania: Transition from Waiver to Traditional Coverage
- Proposed Medicaid Expansion in Tennessee
- Proposed Medicaid Expansion in Utah